RBI MPC 25 bps rate hike: Banks stocks vs NBFCs - Why Jefferies India picked SBI, ICICI Bank, Axis Bank shares

RBI raised the repo rate by 25 bps to 5.5% in its MPC meeting on Wednesday, while changing its stance from 'Neutral' to 'Calibrated Tightening' due to higher-than-expected inflation. Jefferies India expects further rate hikes in the 75-100 bps range and has turned bullish on Indian banks, preferring them over NBFCs, as larger private banks, PSU banks, and HFCs could benefit from positive earnings repricing. The global investment bank has picked ICICI Bank, SBI, and Axis Bank as its top picks among large-cap banks.